We are going to look at some out-of-pocket Medicare costs for 2023 in this post, but we will start with a brief explanation of the eligibility requirements. That’s right, every senior citizen does not automatically qualify for Medicare coverage.
When you pay payroll or self-employment taxes, you earn retirement credits that lead to eligibility for Medicare and Social Security. The maximum annual accrual is four credits, and you need 40 credits to qualify for these benefits. In 2023, you earn one credit for every $1,640 that you earn.
If you do not have sufficient credits, you could qualify on your spouse’s work record if you are married.
Medicare Part A Deductible and Coinsurance
Medicare is broken up into four parts that are designated by the first four letters of the alphabet. Part A is the portion of the program that covers inpatient hospitalization, and there is no monthly premium for this coverage.
There is an annual deductible, and it goes up every year when an inflation adjustment is made. This year, the deductible is $1,600.
This is all you have to pay for the first 60 days in the hospital, but co-insurance payments are required for days 61 through 90. The 2023 coinsurance is $400 a day.
Each beneficiary is given coverage for 60 additional lifetime reserve days that apply to hospital stays that exceed 90 days, but there is a higher coinsurance requirement. It is $800 in 2023.
Medicare Part B Premiums
Treatments that are provided by doctors and other approved health care professionals fall under Medicare Part B, and there is a monthly premium. In 2022, it was $170.10 a month for individuals that claim $97,000 or less on their taxes. This year, the premium went down to $164.90 for individuals that do not claim more than $97,000.
It should be noted that these premiums are automatically deducted from Social Security direct deposits. If the Part B increase exceeds the Social Security Cost of Living Adjustment in a given year, the beneficiaries are held harmless. Their payouts to not go down, and this is a rule that has nothing to do with the unusual pandemic circumstances.
The premium goes up for people that are in higher tax brackets. For filers that claim more than $97,000 but less than $123,000 the 2023 premium is $230.80
There are three other brackets before the premium tops out at $560.50 a month for individual filers that claim more than $500,000. You can visit this page for more information.
The annual deductible for Medicare Part B is very modest all things considered. There is a $226 deductible in 2023.
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